The End of Cheap Oil

Remember what I said about the resource shock that’s rolling down on us?

I said it here

I said it here

And now, I’m saying it again.

Let’s say a miracle happens. We avoid global financial collapse. We take out Iran’s nuclear weapons program. We discover that the EMP weapon that North Korea is developing was just hot air. Russia crawls back into her hole and gives up the idea of empire.

What are we going to do when oil starts costing $200 and $300 a barrel?

And yes, oil at that price is coming. Soon.

Here’s a sobering video for your viewing pleasure:

I stumbled across this video when I read this:

Peak (Cheap) Oil: How It Will Change Your Life (Micro-Doc)
Mac Slavo
November 28th, 2011

Energy Shock, the latest micro documentary (available for viewing below) from producer Daniel Ameduri of Future Money Trends highlights a topic that has been discussed and debated for decades – with a slightly different twist. It is often argued the the Earth has a limited amount of oil in the ground, and as modern industrialized society continues to increase consumption, we are slowly but surely using up the one precious resource that makes it all function. Proponents of the peak oil theory suggest that we have already reached the production tipping point, and that in a matter of a decade or two there will be not be enough oil left to support the needs of a growing global population. Opponents of the theory says that there is plenty of oil in the ground (and under our oceans), and that it’s just a matter of finding new and innovative ways to get it out.Energy Shock details the challenges facing the world as more nations transition from emerging to growth economies, like China, which has increased its oil consumption by some 400% over just the last several years. Yes, there is still oil in the ground and under our oceans. It’s all over the place actually. The problem is that we are rapidly losing the ability to easily access and produce cheap oil, and we’re having to depend more and more on costly drilling methods that will significantly affect the price of oil, gas and liquid fuels over the long-term.

Considering that oil is used in just about everything we can imagine, from the obvious gas-in-your car requirements, to the less obvious production and distribution of things like plastics (cell phones, tires, and tupperware) and food (fertilizing, harvesting, transportation, etc.), a negative impact on cheap oil accessibility will significantly alter how we live our lives. Cheap oil is the only thing making it possible for things like food from farmers in China to be imported into the United States at cheaper prices than local farmers can offer. It makes the economy as we know it, with hour-long one way commutes by laborers, possible. Without cheap oil, everything changes.

The US Department of Energy admits that a chance exists that we may experience a decline in world liquid fuel production between 2011 and 2015. Crude oil is too intertwined into our lives to expect anything less than a total life style change if we have truly peaked in cheap oil production.

The average price of gas in the United State is around $3.25 a gallon. Our economy, which should be clear to most by now, is in total shambles. Even if everything else were to financially and economically stabilize at current levels right now, if the price of oil were to jump to $6 or $15 per gallon, as some estimates have suggested could be the case in the near future, the entire system as we know it would come to a crashing halt. We’re already under enough pressure as it is.

Read the rest of the article here.